Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘disasters’

Between Puerto Rico and food shipments, the Jones Act

After a brief suspension during the moment of maximum public outcry, the Trump administration earlier this month allowed the Jones Act to go back into effect restraining trade between Puerto Rico and the U.S. mainland. According to this WSJ editorial, Puerto Ricans are paying the price:

Ricky Castro is a food and beverage wholesaler and president of Puerto Rico’s Chamber of Food Marketing, Industry and Distribution, known as MIDA, which boasts 200 members across the island. This month MIDA conducted an informal survey of 15 members and found there are roughly 1,400 containers of their provisions sitting in U.S. ports, waiting to be shipped to Puerto Rico.

Mr. Castro attributes the delay to the Jones Act, which mandates that U.S.-flagged, -built and -manned carriers conduct all shipping between U.S. ports. This means an oligopoly of three companies—Crowley Maritime Corp., TOTE Maritime and Trailer Bridge Inc.—conduct the vast majority of the protected trade between the mainland and the island, at inflated costs on aging ships. The ocean-going Jones Act fleet numbers a mere 99 vessels, compared to thousands available from foreign-flagged carriers.

Earlier here, here, here, etc.

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Puerto Rico: Administration won’t extend 10-day Jones Act waiver

Protectionism for the benefit of stateside shipping interests wins out over the rescue-and-rebuild interests of Puerto Rico and its citizenry. And yes, non-Jones ships have already been coming to help in the island’s Hurricane Maria recovery, so forget the claim heard last week that lack of port capacity and the availability of U.S. government vessels makes the law irrelevant. [Scott Shackford, Reason, earlier here and here] And given the Act’s impact on consumers in Hawaii and Alaska, how can it be that all four members of the Hawaii congressional delegation, and two of the three from Alaska, are stalwart backers of the law? [Colin Grabow, Cato] More: Tyler Cowen.

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Jones Act and Puerto Rico, continued

Ten day suspension more than halfway over already, time to refocus: the Jones Act “is a swamp creature that’s strangling Puerto Rico” [Colin Grabow, USA Today] The Act’s inefficiencies cost America many jobs, but they’re harder to identify than the jobs “saved” [Ike Brannon] An aged fleet [Thomas Firey on Regulation magazine analysis] A drag on the energy sector [James Coleman, Regulatory Transparency Project] Only two Washington problems are amenable to easy and correct solutions: simplify the tax code and get rid of the Jones Act [Ray Lehmann, R Street] More: Matt Yglesias. Earlier here.

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October 4 roundup

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Puerto Rico recovery after Hurricane Maria: waiving the Jones Act

The 1920 Jones Act confines shipping traffic between US ports to US-flag, US-crew ships. That includes traffic between the mainland and outlying islands. It’s onerous for Puerto Rico in the best of times and now, in the emergency following the devastation of Hurricane Maria, much worse than that.

The Department of Homeland Security waived the Act beginning Sept. 8 in a limited manner for the purpose of allowing oil shipments to reach areas of Texas and Florida hit by Hurricanes Harvey and Irma. Those waivers expired Sept. 22. On Sept. 25 DHS announced that it would not waive the act for Maria and Puerto Rico even for the limited purpose of oil shipments, let alone general relief. DHS says it thinks most relief supplies for Puerto Rico from the U.S. will be sent by barge and it thinks there will be enough U.S.-flag barges available.

My Cato colleague Nicole Kaeding wrote two years ago that due to the Act, “goods coming from the mainland [to Puerto Rico] can’t come on the most cost-competitive vessel. They must go with one of four U.S. shippers operating that route. The limited competition increases costs. Puerto Rico’s shipping costs are twice those of its island neighbors, making items more expensive to purchase on the island. It also limits Puerto Rico’s ability to export its products to the mainland.”

Now the restrictions also mean that, say, a Norwegian- or Liberian-flagged vessel loaded up in Jacksonville or Savannah with relief supplies will not be allowed to unload them in Puerto Rico, no matter how much port capacity may have reopened there.

Rep. Nydia Velasquez (D-N.Y.) has called on President Trump to suspend the operation of the act for a year to reflect the current emergency, and that should be just an opening bid: Congress should move to repeal the law. Easier said than done: the Act, which also greatly drives up costs for Americans in places like Hawaii and Alaska, is tenaciously defended by U.S.-flag shipping interests and associated labor unions. Inertia, and the special interests that grow up around an existing law that protects some livelihoods, are powerful things. Critics of the Act, including Sen. John McCain (R-Ariz.), have made little headway. Trump, on Wednesday, on why he has hesitated: “a lot of people that work in the shipping industry… don’t want the Jones Act lifted.”

See also Amber Phillips/Washington Post “The Fix” (with link to Overlawyered), Nelson Denis, New York Times (“The Law Strangling Puerto Rico”), Henry Grabar/Slate, Michael Tanner/NRO. Marc Scribner/CEI, and this new WSJ editorial (“DHS argues that under U.S. law the agency can’t ask for a waiver unless there’s a national defense threat and there aren’t enough Jones Act-compliant ships to carry goods. That may or may not be a cramped reading of the law by DHS, but the Department of Defense has fewer legal constraints. Defense Secretary Jim Mattis could simply find a Jones Act waiver is ‘necessary in the interest of national defense.’”)

UPDATE: This morning the White House announced a 10-day suspension of the act. A 10-day suspension itself means very little when set alongside the magnitude of the need in Puerto Rico, so let’s hope this is just the prelude to a longer term fix. I did appearances this morning on CBS Streaming and WNYC/WGBH “The Takeaway” to discuss the issue.

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States’ boycotts of states, cont’d

“California state university researchers are banned from using funds to travel to Texas to study Harvey’s aftermath.” — Joshua McCabe on Twitter. The guidelines from California Attorney General Xavier Becerra do cite the legislature’s allowance of a number of narrow exceptions including travel that is “required…for the protection of public health, welfare, or safety, as determined by the affected agency.” The cited project, however, might not make it past that tough standard, given that it is possible in principle to wait and study flood aftermaths in some other place that (unlike Texas) is not under legislated California sanctions.

All of which should remind us that boycotts of states by other states 1) operate like internal trade barriers; 2) do not do much for national unity. See earlier posts from April 2015 (would Constitution provide any remedy if states closed state university systems to residents of “bad” states?); April 2016 (logic of lifting sanctions against Cuba extends to sanctions against Texas and North Carolina).

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Lawyers work on hurricane-suit theories

While suits seeking to blame climate events on carbon sources and emitters have gone nowhere in the past, some lawyers claim “scientific advances are making it possible to precisely measure what portion of a disaster such as Harvey can be attributed to the planet’s changing climate.” Another set of targets: “government agencies, companies managing infrastructure or architects and engineers who have been involved in building damaged infrastructure, from sewage-treatment plants to levees,” and municipal planners. [Sebastien Malo, Reuters]

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“How Washington Made Harvey Worse”

“A federal insurance program made Harvey far more costly—and Congress could have known it was coming.” [Michael Grunwald, Politico, more] And from July, “Reforming the National Flood Insurance Program: Toward Private Flood Insurance” [Ike Brannon and Ari Blask, Cato Policy Analysis]

More: “Lack of Zoning Is Not Houston’s Problem” [Vanessa Brown Calder, Cato; Nolan Gray, CityLab]

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Japan: families sue over failure to warn of volcano eruption

“Twelve people from five families of those killed in the 2014 eruption of Mount Ontake are set to sue the state and the Nagano Prefectural Government, demanding a total of 150 million yen in compensation, it has been learned.” The suit will argue that the Japan Meteorological Agency failed to raise the alert level for the volcano despite an increase in temblors, “partly on the grounds that the temblors were not accompanied by crustal movements.” [Mainichi]

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Regulating Louisiana’s “Cajun Navy”?

Louisiana’s natural disaster has brought forward, among innumerable other acts of spontaneous social solidarity, the daring rescue exploits of the spontaneously self-organized “Cajun Navy.” [Kevin Boyd, The Hayride] Now, according to The Advocate of Baton Rouge, “Jonathan Perry, a Republican state senator is working on legislation that could require training, certificates and a permit fee for citizen-rescuers…”

Following a public outcry, Perry posted this Facebook video intended, he says, to correct misreporting: his proposals are meant to provide more freedom for volunteers rather than less.

I’m trying to give Perry’s explanation a charitable reading — I guess he hopes something like a TSA preclear process will give police or authorities more confidence than they now have in letting licensed/approved amateurs past barricades and perimeters. But it’s pretty easy for me to imagine that this will change the incentives in a future emergency so as to give the police/authorities reason to be more aggressive in creating and enforcing barriers/perimeters than they currently are. After all, they’ll have the new option of letting only approved permit holders through, which may well seem safer and more controlled to them than letting everyone through. So, to me, it just seems like a really bad idea even if we accept that as his premise. More: Rod Dreher.

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